Txj-Pmi-02 Andy Crowe - C11A Risk Management Tj Q&a

Front 1

1. What is the overriding PMI philosophy of risk management? (4A)

Back 1

The project manager
- is in control and proactively manages events, avoiding as many problems as possible
- must understand how to anticipate and identify areas of risk
- how to quantify and qualify them and
- how to plan for them

Front 2

2. What are the the six risk management processes?

Back 2

- Plan Risk Management
- Identify Risks
- Perform Qualitative Risk Analysis
- Perform Quantitative Risk Analysis
- Plan Risk Responses
- Monitor and Control Risks

Front 3

3. What is the output of "Plan Risk Management"?

Back 3

Risk Management Plan

Front 4

4. What is the output of "Identify Risks"?

Back 4

Risk Register

Front 5

5. What is the output of "Perform Qualitative Risk Analysis"?

Back 5

Risk Register Updates

Front 6

6. What is the output of "Perform Quantitative Risk Analysis"?

Back 6

Risk Register Updates

Front 7

7. What is the output of "Plan Risk Responses"? (2A)

Back 7

Risk Register Updates
Contract Decisions

Front 8

8. What is the output of "Monitor and Control Risks"? (2A)

Back 8

Risk Register Updates
Change Requests

Front 9

9. In which of the 5 process groups do the 6 risk management processes fall?

Back 9

- Initiating: None

- Planning:
=> Plan Risk Management, Identify Risks
Perform Qualitative Risk Analysis,
Perform Quantitative Risk Analysis
Plan Risk Responses

- Executing: none

- Monitoring & Controlling:
=> Monitor and Control Risks

Front 10

10. What are the two risk characteristics?

Back 10

1. Risk is related to an uncertain event

2. A risk may affect the project for good or for bad.
Although risk usually has negative connotations,
it may well have an upside.

Front 11

11. The "Plan Risk Management" process is concerned with one thing ...

Back 11

... with creating the risk management plan

Front 12

12. What is planned in the "Plan Risk Management" process"?

Back 12

... the remaining five risk management processes, which are:
- Identify Risks
- Perform Qualitative Risk Analysis
- Perform Quantitative Risk Analysis
- Plan Risk Responses
- Monitor and Control Risks

Front 13

13. When in the project is the "Plan Risk Management" process performed?

Back 13

The "Plan Risk Management" process is general and high-level in nature.
It is performed early on the project, usually before many of the other planning processes are performed.

Front 14

14. Why is "Plan Risk Management" process performed early on the project?

Back 14

Because the results of this (and other risk processes) can significantly influence decisions made about scope, time, cost, quality and procurement.

Front 15

15. Sketch a diagram of the order of the Risk Management's processes and their outputs.

Back 15

Front 16

16. The risk management plan does what? (6A)

Back 16

- is a roadmap to the other five risk management processes
- defines what level of risk is tolerable for the project
- defines how risk will be managed
- defines how risk will be categorized
- defines who will be responsible for risk activities
- defines the amounts of time and cost that will be allotted to risk activities
- defines how risk findings will be communicated

Front 17

17. What is the single tool for the "Plan Risk Management" process?

Back 17

The single tool for the "Plan Risk Management" process is
"Planning Meeting and Analysis"

Front 18

18. What is the single output of the "Plan Risk Management" process?

Back 18

The single output of the "Plan Risk Management"
is the Risk Management Plan.

Front 19

19. What is one tool to categorize risk?

Back 19

The RBS (risk breakdown structure) is a graphical, hierarchical decomposition used to facilitate understanding and organization.

Front 20

20. What is the single output of "Identify Risks"?

Back 20

The single output is the risk register, which is a list of all risks, their causes, and any possible responses to those risks that can be identified at this point in the project.

Front 21

21. When is the "Identify Risks" process performed?

Back 21

Although "Identify Risks" is typically performed early on the project, risks change over time, and new risks arise. Therefore it may be necessary to perform this process multiple times throughout the project.

Front 22

22. What are "Information Gathering Techniques" used to create the risk register? (4A)

Back 22

- Brainstorming
- Delphi technique
- Expert interviews
- Root cause identification

Front 23

23. What are "Diagramming Techniques" used to show how potential causes can lead to risk?

Back 23

- Ishikawa diagrams or cause-and-effect diagrams or fishbone diagrams
- Influence diagrams
- Flow charts (a graphical representation of complex process flows)

Front 24

24. SWOT Analysis is a tool used in the "Identify Risks" process. How does it work?

Back 24

SWOT analysis is particularly useful since it is a tool used to measure each risk's strenghts (S), weaknesses (W), opportunities (O), and threats (T). Each risk is plotted and the quadrant where the weakness and threats are highest, and the quadrant where strengths and opportunities are highest will represent the highest risks on the project.

Front 25

25. What do you know about the Risk Register?

Back 25

- It is an output of "Identify Risks"
- It provides a list of all identified risks on the project
- It is an essential input into the remaining risk management processes and may be updated throughout the life of a project

Front 26

26. What do you know about "Perform Qualitative Risk Analysis"?

Back 26

- It is usually done rapidly on the project in order to determine which risks are the highest priority on the project
- It takes each risk from the risk register and works to analyze its probability of occuring and impact to the project if it did occur
- By using the probability and impact matrix (PIM), a prioritization and ranking can be created, which is updated on the risk register

Front 27

27. What are the tools used in "Perform Qualitative Risk Analysis"?

Back 27

- Risk Probability and Impact Assessment
- Probability and Impact Matrix (PIM)
- Risk Data Quality Assessment
- Risk Categorization (RBS)
- Risk Urgency Assessment
- Expert Judgement

Front 28

28. What do you know about "Perform Qualitative Risk Analysis"?

Back 28

- It seeks to assign a projected value to quantify the risks that have been ranked by Perform Qualitative Risk Analysis
- This likely value is most often specified in terms of cost or time

Front 29

29. What are the tools used in "Perform Quantitative Risk Analysis"?

Back 29

- Data Gathering and Representation Techniques
- Probability Distributions
- Quantitative Risk Analysis and Modeling Techniques
- Expert Judgment

Front 30

30. What are the "Quantitative Risk Analysis and Modeling Techniques"?

Back 30

- Sensitivity Analysis
- Expected Monetary Value Analysis -> Decision Tree Analysis
- Decision Tree Analysis
- Tornado Diagrams
- Modeling and Simulation -> Monte Carlo analysis
- Expert Judgment

Front 31

31. What is the concept of "Decision Tree Analysis"?

Back 31

Decision trees are used to show probability and arrive
at a dollar amount associated with each risk.

Front 32

32. What are Tornado Diagrams used for?

Back 32

Tornado diagrams are one way to analyze project sensitivity to cost or other factors.
A tornado diagram ranks the bars from greatest to least on the project so that the chart takes on a tornado shape.

Front 33

33. What is the Monte Carlo analysis used for?

Back 33

- Monte Carlo analysis is one technique for simulating the schedule
- Performed by a computer, Monte Carlo analysis throws large numbers of scenarios at the schedule to see the impact of certain risk events
- This technique will show you what is not always evident by simply looking at the schedule
- It will often identify tasks that may not appear inherently high risk, but in the event they are delayed, the whole project may be adversely affected

Front 34

34. What are the strategies for negative risks or threats? (4A)

Back 34

- Avoid
- Transfer
- Mitigate
- Accept

Front 35

35. What are common ways to transfer risks? (2A)

Back 35

- Contractual agreements with another party
- Insurance agreements

Front 36

36. What are the strategies for positive risks or opportunities? (4A)

Back 36

- Exploit
- Share
- Enhance
- Accept

Front 37

37. What does "Exploit" as a strategy for positive risks mean?

Back 37

Exploiting means you are trying to remove any uncertainty.
For instance, if a positive risk of finishing the project early is identified, then adding additional people to ensure that the project is completed early would be an example of exploiting the risk.

Front 38

38. What does "Share" as a strategy for positive risks mean?

Back 38

In order to share a positive risk, the project seeks to improve their chances of the risk occuring by working with another party.

Front 39

39. What does "Enhance" as a strategy for positive risks mean?

Back 39

By working to influence the underlying risk triggers, you can increase the likelihood of the risk occuring. For example, an airline might add flights to a popular route during holidays in order to enhance traffic and profitability during heavy travel times.